I'm a first-time home buyer. The beginning of June, we made an offer on a B of A short sale. The house is in rural area that is on a flood plain. It had been listed for nearly a year already. It was listed at $65000 so we offered $65k. Then, the listing was removed entirely, instead of marked as pending. Last month, it was relisted at $72685 and marked as pending. (Not sure why this happened).
We've been waiting patiently. But last Friday, I did a Google search for the address and found out that it was going to be auctioned off on 10/22. It seemed strange because my agent kept telling me that things were moving along and it seemed as though they were preparing to accept our offer. I was worried about the upcoming auction, so I called the Office of the Comptroller of Currency and they gave me the number to the President of the B of A on the east coast. I told them how much I loved the house and that I was having my baby soon and I really wanted to know what the hold up was. They were very friendly and they told me to have the seller's agent call them so they could help me out "make sure I could get in there and start getting the nursery ready."
I think they are playing with my emotions and trying to milk me because on the next business day, the came back with a very high counteroffer of $90000. That's $25000 more than we offered! They also halted the auction process and did not set another date for the auction. And they put a "rush" on the file and it was transferred to the executive office clear across the country. This is ridiculous and it doesn't even make sense because similar homes in the area have been selling for around the price we offered or lower. Are they being so stupid because they aren't familiar with the area and are pulling the number out of thin air? Maybe they don't realize its on a flood plain?
Anyway, I've been racking my brain trying to figure out what to offer. Or if I should just accept their insane counter-offer and get it over with. Should I stand firm and come back with my original offer of $65000, or should I offer $66600, or should I offer $72685??? I'm confused and don't know what to do and I need to figure it out immediately because they only gave us 48 hours.
Any advice is appreciated!
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I am concur with both Brian and Ron.
With Brian, I agree your agent does not know what they are talking about. Typical of an agent who is probably hoping you will buy a non short sale so they can get paid faster. That is coming from scarcity and not always what you want in an agent.
Ron is spot on, pay it or move on with ANOTHER agent, preferably one that understands the current market. One that will prescreen every listing and listing agent before showing you a short sale.
Are you a cash buyer?
We are paying 20% cash down, but we have a conventional renovation loan for the rest.
So yes you can accept the counter but if the property does not appraise for 90K you are back to square one but you would have an appraisal to possibly help your cause, maybe...
The property is on a flood plain. Similar homes in the area have been selling for between $40000 and $90000. The market is definitely not picking up there. This house has been on the market for a little over a year now. Have you had experience with bank negotiations? With such a gigantic difference in their counter-offer, what amount do you think I should offer? $75000? $70000? What happens if I stick to my guns and offer only $1000 more... any thoughts?
What does your agent say about it? Have your agent pull the comparables and make sure that they pull higher comps too. Many times we try to make arguments with low comparables when indeed there are comparables that do support the higher price. In the end, if you did agree to the higher price, your lender (assuming you are financing the purchase) will only lend on their appraised value.
Make your agent do their job!
My agent doesn't seem to be very experienced with short sales. I made a mistake hiring her, but its too late now. She tells me that we can counter offer if we want, but it will take another 5 months for them to do the entire evaluation all over again, so we should accept or walk.